New $1.29 iTunes tracks provide an opening for competition

The music sold on the iTunes Store is now 100 percent DRM-free with Apple's …

As expected, Apple's new pricing tiers for music on the iTunes Store went into effect last night. The new tiers price tracks at $1.29, 99�, and 69� apiece, depending on their relative hotness at the time of purchase. But higher prices aren't all you'll get with the new tiers, as Apple has declared the transition to DRM-free iTunes Plus tracks to be over. Now, everything available from the popular music store is unencrypted and 256kbps.

Apple’s senior vice president of Worldwide Product Marketing Phil Schiller originally announced the new tiers in January at the 2009 Macworld Expo keynote. At that time, he said that Apple would begin dropping DRM from all of its iTunes Store tracks—a change meant to coincide with the new tiers—and that it expected all 10 million songs to be DRM-free by April. Although Schiller's slide at the keynote said April 1, word spread in March that Apple had told the music labels that the changes would officially go into effect on April 7. That is, of course, today.

There appear to be several caveats to the new pricing system. For one, not every song that was on the iTunes Store before the changeover is there now—if this applies to any of the music you already bought, you are stuck with the DRM-laden version with no upgrade options. Presumably, this is because Apple could only get restriction-free licensing for most of its iTunes Store content, but not all of it.

For example (and I wish this was a joke, but it's not), I seem to have purchased the New Kids On the Block: Super Hits album sometime in the past in its full DRM glory. However, that particular album is no longer available on the iTunes Store after the iTunes Plus/tiered pricing transition, meaning that I'll never be able to upgrade it to be DRM-free through Apple's system. (For those curious, I actually want to do this, as I was creating a running remix in GarageBand for myself and Ars staffer Clint Ecker yesterday, and I wanted to punk him with The Right Stuff. Unfortunately, GarageBand informed me that it can only import unprotected tracks.)

An opening for the competition?

U2's new album No Line On the Horizon is cheaper at the Amazon.com MP3 Store

The other result of the new pricing structure is that the iTunes Store is now the most expensive place to buy most music online. The same tracks that are going for $1.29 on iTunes—such as the iTunes top song of the week "Boom Boom Pow" by the Black Eyed Peas—are still only 99� on Amazon MP3. Music customers who are willing to expend energy on a couple of extra clicks will no doubt to flock to Amazon anytime they see a $1.29 price tag pop up on iTunes. This makes us question what the music labels thought they would accomplish by bullying Apple into the higher pricing in the first place—the same music is still being sold DRM-free elsewhere, and for cheaper. The only thing that might happen as a result of the highest tier is that Apple will lose market share, which would no doubt gladden the dark hearts of record executives concerned that Apple wields too much power in the music industry.

Some may argue that Apple balances out the price difference by offering some of its music for 69�, but we were hard pressed to find any. Even old and crufty Cher songs from the '60s were still going for 99� on iTunes. (If "I Got You Babe" isn't worth 69�, then I dunno what is.) We reached out to Apple and the labels for comment on how much of the iTunes music library is available in the lower-priced tier, and Apple responded by saying there's no official comment outside of what was said in January: that there will be more 69��tracks than $1.29 tracks. This, however, seems incorrect.�In fact, we were unable to find a single 69� track on the entire store on our own, though Apple helped us locate two such albums. All we have to say is that if it's difficult for us to find the cheap tracks, it won't be easy for many iTunes users either.�

Update: It appears as if variable pricing tier is slowly spreading to other music services as well, including Amazon. However, the same songs are not $1.29 at Amazon as they are at the iTunes Store (at least for the time being).�

Jacqui Cheng
Jacqui is an Editor at Large at Ars Technica, where she has spent the last eight years writing about Apple culture, gadgets, social networking, privacy, and more. Emailjacqui@arstechnica.com//Twitter@eJacqui